Saudi Arabia’s $53bn non-oil stimulus may last beyond 2021

Naif Al-Rasheed, managing director of the Private Sector Stimulus Office is focusing on companies in the real estate, hospitality, healthcare and education sectors

Saudi Arabia’s 200 billion-riyal ($53 billion) lifeline to its non-oil economy may be in place for longer than planned as the kingdom supports industries struggling to cope with reforms that pushed up costs and dampened demand.

The programme is earmarking 36 billion riyals ($9.6bn) to boost private-sector growth this year, on top of the 40 billion riyals already spent, according to Naif Al-Rasheed, managing director of the Private Sector Stimulus Office.

The financing could continue beyond the original planned end date of 2021, according to Al-Rasheed, who’s in charge of allocating the money and monitoring its effectiveness.

“The office has a long-term mandate to continuously support the private sector through economic cycles,” Al-Rasheed said in his first news media interview.

Until now, Saudi Arabia hasn’t provided the breakdown of how it planned to deploy the stimulus.

Crown Prince Mohammed bin Salman has embarked on the biggest overhaul of the Saudi economy in its modern history to steer the world’s biggest oil exporter from its near-total dependence on crude.

As the makeover proved disruptive, the stimulus package is aiming to help promote exports, invest in new technologies and reimburse small businesses for an expatriate employment tax. The office has already funded a capital increase for the Saudi Industrial Development Fund and mortgage financing.

Al-Rasheed said the Stimulus Office, set up in 2017, is focusing on companies in the real estate, hospitality, healthcare and education sectors.

Some of the spending will counter the impact of reforms, including higher energy costs and a levy on expatriates that was intended to encourage firms to hire more Saudis.